Article: Supplier diversity doesn’t work without supplier inclusion

Every HR manager worth their salt knows that organisations will fail to realise the many benefits of employee diversity unless they take active steps to include diverse hires and make sure their ideas are heard.

According to Westpac Group’s Executive Manager of Supplier Inclusion & Diversity, Hannah-Jayne Shilling, the same concept applies to procurement teams looking to get the most out of supplier diversity programs. Without inclusion, supplier diversity risks becoming a token effort or box-ticking exercise, but inclusion efforts can unlock and magnify game-changing benefits.

“You can’t have a diverse supply chain without inclusive practice,” says Hannah. “Plenty of diverse suppliers exist in the market, including Indigenous suppliers, disability and social enterprises, but without the inclusive aspect you’re not reaping the benefits of engaging with them.”

In many ways, supplier inclusion resembles Supplier Relationship Management (SRM) with a focus on diversity. “When we actively monitor, build and encourage the relationship and assist in terms of capacity building, we end up being able to work more with diverse suppliers as they scale up,” she says.

Hannah gives the example of Westpac’s relationship with WorkVentures, a social enterprise that manages the bank’s eWaste. Westpac’s efforts to build and maintain a long-term, stable relationship with WorkVentures gives the social enterprise the confidence and stability needed to increase capacity and commit to longer-term projects. In return, WorkVentures has risen to the challenge of meeting Westpac’s needs, working to their timelines and complying with the bank’s strict security requirements.

What sort of benefits flow from supplier diversity and inclusion?

The benefits of supplier diversity are well-known, ranging from greater flexibility to faster response times. Smaller suppliers often provide procurement with a direct line to the CEO, leading to stronger relationships. Supplier diversity is a key element of organisations’ corporate social responsibility efforts.

“We know that Indigenous businesses are 100x more likely to hire Indigenous employees, and at least 50% of a social enterprises’ profits flow to the causes they support,” says Hannah. “We can help scale up these benefits by engaging these suppliers more and ensuring they are seen as key contributors to our business. When we’re seen in the market as inclusive, more diverse suppliers will want to work with Westpac.”

What can an organisation do to build inclusion into their supplier diversity program?

Hannah recommends 10 steps to ramping up supplier inclusion in businesses of any size.

  1. Build awareness among the procurement team to help colleagues understand the social outcomes that can be achieved and start factoring D&I into the way they speak with the business
  2. Simplify complex procurement processes and ensure they are accessible to everyone
  3. Ensure your payment processes are fast because late payments have a huge impact on smaller suppliers
  4. Invite diverse suppliers to participate in sourcing events, making it clear what you are looking for
  5. Use your influence to encourage larger tier-one suppliers to work with diverse tier-two suppliers
  6. Take a targeted approach to support and build up a diverse supplier so you can engage them more
  7. Provide diverse suppliers with constructive feedback and listen to their feedback about their experience of working with you
  8. Give diverse suppliers a heads up that you have a sourcing event coming, as they may need time to prepare for a proposal
  9. Offer to walk diverse suppliers through your digital procurement system requirements and be available to answer any questions
  10. Carve up large contracts – for example, ask diverse suppliers to respond on a regional basis if they can’t respond nationally, or ask them if there’s a particular aspect of a service they can provide

Whose job is supplier diversity and inclusion?

Although Westpac has a whole team dedicated to supplier D&I and sustainability, Hannah acknowledges that many organisations will not have capacity to dedicate specific staff to diversity. But the truth is that D&I is everybody’s job in procurement.

“Procurement professionals are the ones managing the sourcing events, engaging suppliers and putting inclusive practices into action,” she says. “They are in regular communication with diverse suppliers, helping them respond to sourcing events and tailoring contracts to make them more accessible.”


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